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Lessons from China

Dr Keshmeer Makun
Monday, November 13, 2017

China is now a major country in the world with an economy that drives global growth and an international status of growing importance and influence. So we should also pay close attention as the world will be impacted either directly or indirectly by the domestic and foreign policies of the Communist Party of China (CPC).

The 19th National Congress of Communist Party of China (CPC) was held from October 18-26, 2017. This major event in the Chinese political system occurs once every five years. The 19th national congress was unique and came at a critical time not only for China but also for the world.

It has come at a time when the country is going through the critical stage of finalising the dream of building a moderately prosperous society as well as the crucial time of expansion of socialism with Chinese characteristics.

However, the national congress' aim is to set the party's domestic policy objectives and elect its top leaders. The national congress not only reviewed the party's work since 2012 and set the new five-year plan to guide nation's development but also for the future of the rest of the world.

For example, on the domestic front the goal of poverty alleviation. In the past five years, China has lifted about 65 million people out of poverty, about equal to the entire population of the UK.

On the international front to the goal of connecting the international community, China has provided blueprint for global development under the Belt and Road Initiative which will have a transformative effect on Asia and the world.

"China should secure a decisive victory in building a moderately prosperous society in all respects and strive for the great success of socialism with Chinese characteristics for the new era," echoed the clear message from President Xi Jinping.

The idea of Chinese socialism for a new era, moving towards helping people to achieve a better life or life they aspire, will have a huge impact on the economy in many years to come.

For rest of the world, China is committed to building a community with a shared future for mankind; this is another message that top leaders gave. They have rapidly developed global partnership and expanded the convergence of interests with rest of the world.

This in itself is a good message to the world on how China intends to move forward and will have huge impact on rest of the world's economy.

While the prospects are bright, they do not shy away from outlining inadequacies in the work of the CPC and the continuous challenges ahead.

For example, the issue of corruption, national security, poverty alleviation and new principal contradiction of peoples growing needs for better life and unbalance development.

The ability to innovate, improving the real economy and protecting the environment are also some key challenges for China and the rest of the world.

While the national congress has laid out necessary steps, it will be interesting to see how Chinese leadership will play a role in this as well as global governance in the next five years.

Below is an account of China's economic achievement in the past five years.

China's economy expanded by an average annual rate of 7.2 per cent since the 18th national congress in 2012, outstripping the 2.6 per cent average global growth and 4 per cent growth of developing countries.

GDP expanded by 6.9 per cent year on year to 59.3 trillion yuan ($F18.5tn) in the first three quarters of 2017. China appears to have confidence and capability to realise the goal of developing into great modern society.

Substantial progress in Chinese innovation can be seen in the growing number of unicorns in China. It has more than 90 unicorns, accounting for a third of the world.

Private investment has started to play a bigger role in the Chinese economy and it's growing at a steady and sustained pace.

Private investment accounted for at least 60 per cent of China's total fixed asset investment. According to NBS, private investment generated about 80 per cent of China's jobs, 60 per cent of GDP and 50 per cent of tax revenue.

Foreign investment policies are being more open, equitable and convenient.

China has created more than 13 million new urban jobs over the period 2013-2016.

China's energy use per unit of GDP declined by 17.9 per cent while solar power capacity increased 21.4 times over 2012-2016.

On people's lives, Chinese leadership has also made substantial progress. For example, per capita disposal income for all residents on average increased from 7311 yuan ($F2274) in 2012 to 23,821 yuan ($F7410) in 2016. The number of rural people living in poverty also declined from 98.99 million in 2012 to 43.35 million in 2016.

Further, the disposable income per capita of rural residents in poor areas also rose 10.7 per cent on average from 2013 to 2016.

How does China do it? The secret appears to be robust and confident leadership, and guidance of the CPC.

As Mr Xi said in 2012 after being elected general secretary of CPC, "The people's desire for better life will always be our goal."

In addition, social and political stability, well researched supply-side structural reforms and conducive environment for businesses and private sector to develop and innovate which brings better quality, higher efficiency and stronger drivers of economic growth also appear to play a critical role.

This is not only important for a large developing country like China but also to all small developing countries in the world.

* Dr Keshmeer Makun teaches at the Fiji National University's School of Economics. Views expressed are his and not of this newspaper or FNU.

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